CCEP Shares Rally 2.08 as Trading Volume Plummets to 411th in Liquidity Amid Strategic Downgrade and High-Volume Strategy Surpasses 166 Return

Coca-Cola Europacific Partners (CCEP) closed August 7 with a 2.08% gain, marking improved momentum despite a 26.16% drop in trading volume to $0.29 billion, ranking 411th in market liquidity. The stock’s performance follows a strategic downgrade from Morgan Stanley, which cut its rating to Equal-weight from Overweight, citing a narrowing risk-reward profile after a 24% annual outperformance against parent company Coca-Cola Co and consumer staples indices. The bank highlighted CCEP’s 4-year high valuation relative to KO and noted limited upside potential amid weak Indonesia operations, which prompted a revised 3-4% revenue growth forecast for 2025.

Recent earnings updates showed CCEP’s first-half revenue rose 4.5% to €10.3 billion, with operating profit up 19.4% to €1.4 billion, though European volumes dipped 0.3% in comparable terms. Management cited stabilization in Indonesia and stronger European demand as growth catalysts, but analysts like Barclays’ Lauren Lieberman pointed to underwhelming volume recovery in key markets. Morgan Stanley reduced FY25/26 EPS estimates by 4-6% to reflect lower top-line visibility and FX pressures, while maintaining a €83 price target based on a 19x FY26e P/E multiple. Parent company Coca-Cola’s broader diversification in product lines and geographies was flagged as a long-term advantage over bottlers.

The strategy of purchasing the top 500 stocks by daily trading volume and holding them for one day delivered a 166.71% return from 2022 to the present, outperforming the benchmark return of 29.18% by 137.53%. This underscores the role of liquidity concentration in short-term stock performance, particularly in volatile markets.